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Financial Statement Analysis and Financial Management

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Please use any of the following Websites, which are a good starting point, Market Watch-Wall Street Journal & Financial Times, you may also use any others you deem appropriate. The discussion should focus on Financial Statement analysis, and an introduction to Financial Management.  Please explain by use of structural valuation concepts and using at least three different companies and their websites from these major companies, Amazon, Berkshire-Hathaway, Waste Management, Walmart, A T & T, and MasterCard. Review the three basic financial statements, from their annual report, make sure you read their M & D section. What did you learn?  What was interesting and how does it apply to our future study of financial management? 

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Solution Summary

This posting introduces financial statement analysis and financial management. It also uses three examples from real companies.

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Structural valuation concepts as related to financial statement analysis and an introduction to financial management relate to the capital structure of the company. The capital structure can be evaluated through the structural valuation or the evaluation of the capital structure of the company. This means evaluating how the company uses its debt and equity. In general, if a capital structure shows a relatively low level of debt and a large proportion of equity, it is a good indicator of the quality of investment (a).

Structural valuation concepts commence with the company's mix of debt and equity. Equity means the company's common stock, preferred stock, and retained earnings. The debt is usually meant to include short-term borrowing, a part of the principal amount of operating leases, long-term debt, and redeemable preferred shares. Usually, the structural valuation or the assessment of a company's capital structure is done through the analyses of total debt/ total equity, long-term debt/ equity, and net interest coverage.

The total debt relative to the amount initially invested by the owners and the earnings that have been retained is shown as the total debt/ total equity ratio. This ratio is also called the debt-to-equity ratio. This ratio shows the leverage of the company, the stability of a company, and its ability to raise ...

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